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Sustainable Development and Currency Exchange Rate Behavior

Author

Listed:
  • Mohamed Ariff

    (Department of Economics and Finance Sunway University 47500 Bandar Sunway Selangor, Malaysia Author email: ariff13@gmail.com)

  • Alireza Zarei

    (Economics and Finance Sunway University 47500 Bandar Sunway Selangor, Malaysia alirezaz@sunway.edu.my Author email: alirezaz@sunway.edu.my)

Abstract

We discuss currency volatility as a measure of currency instability using 15 currencies from developed and emerging economies. The IMF and others have recorded how countries manage their exchange rates to promote sustainable economic growth by designing exchange rate regimes as a pillar within economic policy. The findings herein show how to track currency instability using a given currency's volatility against the volatility of a benchmark currency of importance to the given currency. This is termed relative volatility. The study proceeds to test whether the parity factors and country risk factor are significantly correlated with exchange rate relative volatility.

Suggested Citation

  • Mohamed Ariff & Alireza Zarei, 2018. "Sustainable Development and Currency Exchange Rate Behavior," Asian Economic Papers, MIT Press, vol. 17(3), pages 148-173, Fall.
    • Handle: RePEc:tpr:asiaec:v:17:y:2018:i:3:p:148-173
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    References listed on IDEAS

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    2. Phouphet Kyophilavong & Gazi Salah Uddin & Muhammad Shahbaz & Charles Harvie & Teerawat Charoenrat, 2019. "Money Demand in a Dollarized Economy: Evidence from Laos PDR," Asian Economic Papers, MIT Press, vol. 18(1), pages 99-115, Winter/Sp.
    3. Ariff, Mohamed & Zarei, Alireza & Bhatti, M. Ishaq, 2021. "Monitoring exchange rate instability in 12 selected Islamic economies," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).

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